GOVERNANCE & FUNDING
TCTA: its financial performance and future plans The Trans-Caledon Tunnel Authority (TCTA), a stateowned entity (SOE) charged with financing and implementing bulk raw water infrastructure projects, gives an update on the new water body, its irregular expenditure and funding pipeline.
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EO Percy Sechemane believes that the TCTA is one of the best performing and well-run SOEs in the country. “We received a qualified audit opinion for the first time in our 34-year history for 2018/19 financial year and an unqualified audit opinion for the 32nd time for the 2019/20 financial year. Comparisons of TCTA’s debt with other SOEs is ill-informed, as TCTA is primarily
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set up to source debt for critical projects on behalf of government. The TCTA model is one where government, through a ministerial directive, instructs TCTA to source debt funding at competitive rates for commercially viable bulk water infrastructure projects and to implement such projects on behalf of government.” However, the 2019/20 annual report was completed four months later than the deadline of 31 August 2020. Sechemane explains that the delay in the completion of the annual audit was largely due to the postponement of the audit of the Lesotho Highlands Water Project (LHWP) on the Lesotho side. “Going forward, we will have to clarify the roles and responsibilities of the different parties on the LHWP and make the institutional arrangements less complicated. “TCTA and other SOEs are facing challenges within the funding environment. Due to the nature of water projects, if people do not pay for their water, one cannot simply remove the infrastructure and put it elsewhere. This is why funders want guarantees for their capital. However, TCTA has received a satisfactory response from the market
for raising R15.2 billion for a maturing WSP5 bond that is for Phase 2 of the LHWP. We have ongoing engagements with the Department of Water and Sanitation (DWS) and National Treasury on the issuing of government guarantees. The longer we can stretch the debt, the better – ensuring that there are no spikes or peaks that will make water unaffordable,” explains Sechemane. While remote working, closed borders and stringent lockdown rules are expected to have a significant impact on the 2020/21 Audit Report, TCTA aims to meet its deadline of 31 August 2021 for submission to Parliament and is working towards its 33rd unqualified audit opinion.
National Water Resources Infrastructure Agency
President Cyril Ramaphosa announced in his 2021 State of the Nation Address
Percy Sechemane, CEO of TCTA
